A small business can start in a spare room in your house or even in your garage. But the time will come when the company will need its own space. Some businesses can thrive without their own headquarters, while others benefit from a place to welcome customers and suppliers.

However, many entrepreneurs don’t have the initial capital to buy a storefront, office, or building. They choose to rent a space—a common practice that requires some planning to protect your liabilities.

If you think your company is ready for its first exclusive space, there are some things to know throughout the rental process.

rented space

Commercial vs. Residential Lease:

First of all, renting a commercial property is quite different from renting a residential property. Contracts are generally more complex and less regulated. This means fewer legal protections, increasing the need to work with trusted real estate agents.

There is also a difference in rental time. While a residential unit is usually negotiated for one year, commercial leases tend to last longer (often a minimum of three to five years, depending on the tenant). Finally, unlike residential leases, the property owner is typically only responsible for the building’s physical maintenance.

Review your contract carefully and clear all your doubts before signing it.



The main question you should ask yourself before taking your business from your home to a rented property is: does my budget allow me to commit a certain amount for such a long period?

There are different ways to calculate the ideal budget for a small business. Experts recommend you divide your annual rent by your estimated revenue. A small business should set aside between 5-10 percent of its budget for commercial leasing. More specialized businesses, such as doctors’ offices and law firms, tend to pay more.

Again, carefully review the contract. Even if you have the advantage of not worrying about property taxes in a rented space, be sure to calculate the costs associated with the move (purchasing furniture and utilities, renovations, adaptations of the space, etc.), so there are no surprises in the future.

You can also consider intermediate options. Many businesses invest in coworking spaces where different companies share the same office space and save money with the use of common infrastructures and equipment.


Although you are free of some costs and obligations because the rented property is not yours, insurance is not something you can avoid. The property owner may have insurance for the building, but business insurance will help you protect the company’s assets and reputation. The basic insurance options you should consider are:

Commercial Property Insurance–

This policy protects your company’s assets, including office furniture, computers, commercial inventory, etc. Some policies can even help you with damage in the event of a disaster, such as a fire.

General Liability Insurance–

Even if you are in a rented space, you can still be sued for damages resulting from your commercial services’ negligence. For example, a third-party personal injury. General liability insurance protects a business owner in these cases and can also cover third parties’ medical fees harmed by your business.

Workers’ Compensation Insurance–

This is a requirement in most states for companies with a certain number of employees (usually from three to five). Workers’ comp pays medical care expenses and lost wages to employees who were injured at work.

Location is Key:

The process of choosing a commercial space shouldn’t be different from renting a residential property: why should you settle for the first place or offer? Be sure to investigate possible options thoroughly before signing a contract, as the appropriate lease can determine your business’s success. Some factors to consider before deciding are:

  • Location close to essential services (such as banks and public transportation) and other conveniences
  • Adequate location for your customers
  • Adequate location for your employees and yourself
  • Parking spaces nearby
  • Accessibility of the building and the area
  • Need for renovations or adaptations in the property
  • If there’s adequate space to accommodate your business, especially if you are considering growing soon

Remember, it’s difficult to start a business in a distant and deserted area. If there’s no other option, try to attract customers by investing in advertising the same amount you will save on rent.

Choose Your Business Headquarters Wisely:

Choose Your Business Headquarters Wisely

Your company’s commercial space will tell a lot about your business and its future potential. Therefore, you should consider many factors when renting a commercial space for the first time, like the location, cost of rent, duration of the contract, and if the space in the property offers conditions for future expansion.

You can’t go wrong if you start small, adapting your company’s headquarters to your budget and leave a future expansion for a more financially appropriate time. On the other hand, if your business is already taking off and you can barely handle orders in the current space, it’s better to consider a bigger property from the start.

Whatever your choice, don’t forget the importance of being insured and choosing a space carefully. This will protect you in the long run and help you grow your business successfully.

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Arina Smith

I enjoy writing and I write quality guest posts on topics of my interest and passion. I have been doing this since my college days. My special interests are in health, fitness, food and following the latest trends in these areas. I am an editor at OnlineNewsBuzz.